FREEDOM INC. PAYS $45,000 PENALTY FOR FAILING TO REGISTER AS POLITICAL COMMITTEE

WASHINGTON – The Federal Election Commission (FEC or Commission) announced today that it has reached a conciliation agreement with Freedom Inc., a Kansas City, Missouri non-profit political organization. The group, which claims tax exempt status under Section 501(c)(4) of the Internal Revenue Code is registered with the Missouri Ethics Commission as a state political committee, and will pay a $45,000 civil penalty for violations of the Federal Election Campaign Act (FECA).

The Commission found that Freedom Inc. received contributions and made expenditures in excess of $1,000 supporting Emanuel Cleaver’s campaign in Missouri’s 5th Congressional district in 2004. The FEC also determined that the group’s major purpose was campaign activity. Having received contributions and made expenditures, and having satisfied the “major purpose” test, Freedom Inc. was required to register with the Commission as a political committee and comply with the contribution limits and prohibitions of FECA.

The group spent more than $45,000 for newspaper and radio advertisements, yard signs, voter guides and other materials that expressly advocated Cleaver’s election to Congress. Freedom Inc. also spent more than $20,000 on get-out-the-vote activities that should have been paid at least partially with federally allowable funds. Political committees are required to properly identify themselves in these types of communications, and report these activities to the FEC.

During the 2004 campaign Freedom Inc. also accepted at least $90,000 in contributions that either exceeded federal contribution limits or came from corporations and unions which are prohibited from giving under FECA.

5492 under case numbers in the Enforcement Query System. They are also available in the FEC’s Public Records Office at 999 E St. NW in Washington.

There are four administrative stages to the FEC enforcement process:

1. Receipt of proper complaint

3. “Probable cause” stage

2. “Reason to believe” stage

4. Conciliation stage

It requires the votes of at least four of the six Commissioners to take any action. The FEC can close a case at any point after reviewing a complaint. If a violation is found and conciliation cannot be reached, then the FEC can institute a civil court action against a respondent.